Gas prices may stabilize

They could be the lowest since 2010, if forecasts for 2014 hold true, AAA says

Fuel prices are listed on a sign at the Fred Meyers on Southeast 164th Avenue on Monday. (Zachary Kaufman/The Columbian)

Gasoline prices in 2013 peaked at around $4 a gallon in May and have dropped steadily in recent months. The average in Vancouver this week is $3.34 per gallon, which is higher than the prices posted Monday at the Fred Meyer store on Southeast 164th Avenue. Industry analysts expect prices to drop slightly in 2014. (Zachary Kaufman/The Columbian)

Local gas prices fluctuated wildly during 2013, but experts in the highly volatile world of gas price trends are predicting slightly lower prices this year.

Nationally, the Energy Information Administration is predicting a national average of $3.43 per gallon in 2014. Similarly, the auto club AAA is predicting an average gasoline price for the year of $3.40 to $3.50 a gallon, said Marie Dodds, spokeswoman for AAA Oregon/Idaho. Based on the historical pattern of higher average prices locally, Dodds said that Washington and Oregon motorists can expect to pay about 10 cents more per gallon than the national average.

Last year's national average for gasoline was $3.50 per gallon, Dodds said. While Washington's average was $3.66, Vancouver prices came in slightly lower at $3.63 per gallon, matching Oregon's average price for the year. Those prices were a break from the previous year: average prices in 2012 exceeded $3.80 per gallon in both Oregon and Washington, according to AAA.

If the forecasts for 2014 hold true, average gasoline prices will be the lowest since 2010, Dodds said. But, given the complexity of world politics and economic trends, "the crystal ball is very murky."

What's not so murky, although not easily explained, is average gas prices in the Northwest that generally exceed the national average. The price tracking by GasBuddy.com shows the sometimes dramatic differences in prices in the Northwest compared with the U.S. average. In mid-May, prices reached $4.04 per gallon in Seattle and $3.95 in the Portland area, according to GasBuddy.com. At that time, the national average was $3.70 per gallon.

Washington and Oregon are more distant from oil production sites than other parts of the country, a factor that pushes up prices, notwithstanding the fact that Washington is home to major refineries, Dodds said. Also, California's stringent clean-air rules drive up the price of gasoline in that state, and refineries in some cases simply sell the same gasoline in the Northwest at those higher prices, Dodds said.

At the retail level, local gas station owners can set prices that the market is willing to pay, Dodds added. Some focus on service and others on price.

"There are as many different business philosophies at gas stations as there are owners," she said. "It's very common to see prices vary widely."

One reason that industry analysts expect prices to stabilize is the increased supply of domestic oil. U.S. gasoline production jumped to 9.72 million barrels a day in the week ending Dec. 20, the most in data going back to 1982, the Energy Information Administration reported last week. Refiners have ramped up operations to benefit from a flood of less-expensive domestic crude oil as U.S. output reached the highest level in 25 years.

The availability of domestic fuels can take some of the bite out of international turmoil that affects the availability of imported oil, Dodds said.